Extreme weather events are on the rise. According to NOAA, the US has experienced 28 drought events, 33 flooding events, 9 freeze events, 132 severe storm events, 52 tropical cyclone events, 18 wildfire events and 19 winter storm events in the last 40 years, with severe impacts and significant power system failures occurring more frequently.
Due to recent extreme weather-related power systems performance failures in both California and the South-Central US, State and Federal regulators, as well as industry stakeholders, are actively examining the power system planning and operations practices for all electric utilities.
FERC hosted a two-day technical conference addressing industry impacts due to Climate Change, Extreme Weather, & Electric System Reliability in June which may result in future actions requiring changes to assumptions and approaches for operations and planning. Market designs under FERC jurisdiction are already changing in response to winter weather events and legislation has been passed in Texas to address recent cold weather issues there. As system performance impacts continue to be scrutinized, it is reasonable to expect changes to various aspects of the utility regulatory paradigm including mandatory NERC standards. These changes may come in the areas of emergency operating procedures, system planning and spare equipment procurement processes among other topics.
The NERC Board of Trustees recently approved standards modifications related to cold weather preparations which will be considered for approval by FERC in the future.
NERC Recommends Summer Reliability Improvements
In a recent summer reliability assessment, NERC notes several areas of the country where reliability is at risk during extreme weather events.
- In Texas the on-peak Planning Reserve Margins have increased to 15.3% from 12.9% with the addition of 7,858 MW wind, solar, and battery resources since 2020. However, extreme weather can affect both generation performance and demand which can lead to energy shortages. With a significant portion of electricity supply coming from wind generation, operators must have sufficient flexible controllable resources to cover periods of low-wind and solar output.
- Resource adequacy is a significant concern for the California portion of WECC this summer with overall capacity and demand projections for the area at similar levels to those seen in 2020 when a wide-area heat event caused energy emergencies. Though new flexible resources have been added in California, peak demand projections have also increased in many parts of the west, and overall resource capacity is lower compared to 2020.
- Within MISO and NPCC-New England above-normal levels of demand in the 90/10 load forecast are likely to exceed generating resources within these two operating areas may require transfers from surrounding areas.
To protect performance this summer, NERC recommends:
- Load-serving entities (LSE) and regulators should work with their Balancing Authorities (BA) and Reliability Coordinators (RC) to ensure that clear lines of communication are open for coordination during periods of system stress.
- RC, BA, and Transmission Operators must review outage schedules well in advance of the high stress seasons and coordinate across the RC area.
- BA and RC should conduct drills with their energy emergency alert programs to ensure that they are prepared to signal need for conservative operations, restrictive maintenance periods, and voluntary load reductions.
- BA and Generator Operators should verify protocols and operator training for communication and dispatch.
- LSE must prepare for demand-side conservation measures and potentially condition customers to their need and efficacy.
- RC and BA need to maintain the highest vigilance during peak risk hours and forecasted high temperature periods.
- LSE should review non-firm customer inventories and rolling black out procedures to ensure that no critical infrastructure loads (e.g., natural gas, telecommunications, etc.) would be affected.
As a result, to stay ahead of the change curve utilities must:
- Follow and prepare for regulatory trends including the outcomes of NERC Lessons Learned.
- Have strong internal controls for compliance tied to their planning, asset management and equipment configuration change processes.
- Examine trends in demand side management market mechanisms which may make forecasting load more challenging as the new market mechanisms are introduced.
- Follow trends in the penetration of intermittent resources (wind and solar) which are being promoted to meet environmental goals.
Be Prepared to Handle System Stressors
To proactively address increasingly frequent and severe system stressors, utilities must re-evaluate their traditional approach to the following:
– Existing operating and planning practices
- Are the existing planning processes for extreme cases conservative enough?
– Seasonal and long-term assessments
- Is the reliance on past weather experience as a precursor for future operating conditions still valid considering climate change trends?
– Outage planning and coordination
- How will extreme weather be handled from an operations perspective?
- Is there an over reliance on on neighboring systems for generation support during extreme weather events?
– Reserve procurement
- How will you increase reserve requirements during forecasted extreme weather events?
– Demand-side management
- Use of planned load reduction through market mechanisms to bring load and capacity into balance before stress situations occur should be considered.
– Unit commitment and dispatch
- The availability of fuel and energy limited resources is a key part of operational planning.
– Short-term asset management
- Outage and maintenance management techniques are needed to deal with greater proportions of intermittent, weather dependent resources serving the system demand.
– Emergency operating procedures
- IT is necessary to proactively and preemptively alerting the public to impending shortages due to weather and other events.
TRC can Help
Undoubtedly there will be changes coming to the electric industry because of recent extreme weather events. Your company may be already considering making new, more conservative assumptions regarding the system conditions that your system will need to plan for and operate to. An independent approach to this review effort will be beneficial to your company. TRC understands the challenges faced by its clients in planning their systems for both the near-term and long-term horizons. TRC’s planning and asset management experts can provide an independent review of your company’s planning processes , related internal controls and suggest corrective measure to deal with system stresses and extreme weather.
Resources:
FERC Technical Conference – Climate Change, Extreme Weather, & Electric System Reliability
NERC 2021 Summer Reliability Assessment
Next Steps:
TRC follows the regulatory trends closely. TRC’s approach to power system planning, design and operations balances solutions that incorporate appropriate industry trends, mandatory standard requirements, regulatory guidance, compliance obligations, best practices, operational goals, and budgets. Our work for both public and private sector clients is a testament to our understanding of power system planning and operations. TRC advises numerous clients how to stay ahead of the curve regarding the regulatory trends and the technical aspects of their operations including related mandatory standards compliance obligations.
This regulatory update is a service to TRC’s utility clients, helping keep you informed of issues that impact your company’s electric system reliability risks along with related topics regarding regulatory developments to help you achieve your company’s business goals.
Jim Whitaker, PE
Jim Whitaker, PE is Supervisor of Power Systems Studies at TRC. He has over 30 years of experience in Transmission and Distribution Planning, and Substation, Transmission and Distribution Engineering. His Transmission Planning projects include coordinating joint/regional 10-year transmission plans, generator interconnections, regional system assessments, as well as NERC compliance studies. His projects have included studies for both Utilities and Project Developers across the United States in the Eastern and Western Interconnection transmission systems as well as ERCOT. Prior to joining TRC, Jim worked for Xcel Energy, Peak Power Engineering, Tucson Electric Power and Virginia Power. Contact Jim at JWhitaker@trccompanies.com
Steve Persutti
Steve Persutti is TRC’s Senior Vice President of Business Development. He has 25 years of comprehensive management experience within the energy industry and a consistent and successful record in strategic business planning, productivity and efficiency improvements, systems design and implementation, and employee collaboration. His areas of expertise include engineering management, project management, EPC project management, construction management, financial analysis and customer service. Steve has an M.B.A in Finance from the University of Hartford and a B.S. in Marketing from the University of Connecticut. Contact Steve at spersutti@trccompanies.com.